Peabody's stocks fall as production halts at Moranbah mine
PEABODY does not expect any production from North Goonyella for the remainder of the year after a fire started burning underground at the mine north of Moranbah.
Peabody has issued an update on its report on conditions at its North Goonyella Mine following indications of a fire in a portion of the mine.
"All employees were outside the exclusionary zone at the time of the incident," a statement from Peabody reads.
"The company continues to actively work in conjunction with the Queensland Mines Inspectorate and other third-party experts toward a plan to extinguish the fire and contain the impacts."
Peabody says they do not expect any production from North Goonyella in the fourth quarter of 2018 and has a small amount of coal in inventory to ship.
"It is too early to assess the full financial impact to future periods as a result of the ongoing issue," they stated.
"However, with strong performance from other mines, the company is maintaining its full-year 2018 metallurgical coal sales volume targets of 11 - 12 million tonnes."
Regarding the financial profile of North Goonyella, the mine shipped 1.6 million tons in 2016 and 2.9 million tonnes in 2017 (with no longwall move).
"North Goonyella ships a high-quality hard coking coal that typically realises at or near the premium hard coking coal benchmark," Peabody said.
"The mine's costs have typically averaged at or above the high end of Peabody's met coal cost per ton target range of $85 to $95 per short ton.
"Peabody is taking typical steps with regard to insurance coverage. The company has potentially applicable insurance policies with a coverage limit of $125 million above a deductible of $50 million."
Peabody's stock price has also fallen following the incident, with Peabody Energy Corporation (NYSE: BTU) closing on Friday at $35.64, which is a 13.45% fall.